E-mart names outsider as new CEO amid downturn
For the first time in its 26-year history E-mart has named an outsider as its new CEO, the company said Monday.
Shinsegae Group’s discount store chain said Kang Heui-seok will replace outgoing CEO Lee Gap-su who has stepped down from the role, taking responsibility for the chain’s poor performance.
The bold decision came after Korea’s leading discount chain operator plunged into the red in the second quarter amid intensifying competition from online shopping rivals and e-commerce giants.
The company swung to an operating loss of 29.9 billion won ($24.6 million) in the April-June period, its first quarterly loss since its inception in 1993.
Kang had previously served as a partner of Bain & Company Seoul and Shanghai offices since 2005, leading consumer products and retail practices.
Before joining the global consulting firm, he had worked at the Ministry of Agriculture, Food and Rural Affairs as a director. At the ministry, he built the capacity to deal with international trade negotiations.
E-mart explained that Kang’s extensive retail experience and ability to drive growth at some of the world’s most successful brands equips him to lead the company during this critical time.
“E-mart’s personnel reshuffle was carried out based purely on performance,” a Shinsegae Group official said. “As the company lies in a critical period for readjustment, we sought drastic change and innovation.”
Kang’s immediate focus will be on accelerating E-mart’s business transformation.
That will include improving the shopping experience for customers both online and in stores, boosting the range of merchandise and reviewing the group’s cost structure and asset base.
The discount chain operator will divide its product department into two categories — groceries and nonfood items — to enhance product expertise. It will also reform the fresh food category to strengthen its criteria and ensure freshness.
In addition to expanding the sourcing business, E-mart has decided to integrate the function of overseas sourcing with Traders, Shinsegae’s warehouse-style supermarket.
Kang is a graduate of Seoul National University with a bachelor’s degree in law and a minor in economics. He earned his MBA from the Wharton School of the University of Pennsylvania.
Investors embraced the move, pushing shares in E-mart more than 0.5 percent higher after the company announced its new CEO.
Apart from E-mart, Shinsegae Group also appointed Han Chaeyang, who had been CFO of Shinsegae, as new CEO of Shinsegae Chosun Hotel.
The remaining leadership changes will be announced in December, it said.